This afternoon, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet held a hearing titled “Abusive Patent Litigation: The Issues Impacting American Competitiveness and Job Creation at the International Trade Commission and Beyond.” This hearing comes on the heels of a broader hearing on abusive patent litigation held by the same committee two months ago, as well as a different hearing in July 2012 that generally addressed the ITC’s role in deciding patent disputes. Several witnesses representing a variety of diverse backgrounds and interests testified today before the subcommittee, including:
- Kevin Rhodes, VP and Chief IP Counsel for 3M Innovative Properties Co.
- Jon Dudas, Former Director of the USPTO (and a member of the board of non-practicing entity MOSAID Technologies)
- Prof. Colleen Chien of Santa Clara University
- Russell Binns, Associate General Counsel for IP Law & Litigation at Avaya
- Deanna Tanner Okun, Former Chairwoman of the ITC (and a partner at Adduci Mastriani & Schaumberg)
- David Foster, Chairman of the Legislative Committee for the ITC Trial Lawyers Association (and a partner at Foster, Murphy, Altman & Nickel)
A link to the video webcast of the full hearing is available at the House Judiciary Committee’s website, along with PDFs of each witness’s prepared testimony. Our friends at Patent Progress also live-tweeted the event — take a look at their Twitter feed @PatentProgress for their blow-by-blow account.
As we anticipated, while standard-essential patents were not the focus of this particular hearing, the issue of SEPs was indeed given some attention. In his opening remarks, Congressman Melvin Watt noted concerns some have expressed about the potential for improper usage of standard-essential patents in seeking injunctive relief, and Congressman Ted Poe briefly quizzed Prof. Chien about the propriety of asserting standard-essential patents in the ITC.
But most of the testimony and Q&A at the hearing focused on other issues that have been hot topics for litigants in patent disputes — both in district courts and at the ITC. These issues include:
- The different types of non-practicing entities (NPEs) and patent assertion entities (PAEs), and the costs and benefits on the U.S. economy associated with these entities.
- Whether the newly revised version of the SHIELD Act unfairly targets NPEs & PAEs based solely on their business models, not on the merits of their actions.
- Institution of a true “loser pays” fee-shifting regime for patent cases — the vast majority of the witnesses seemed to approve of this idea — or at least making it easier for prevailing defendants to win awards of attorneys’ fees from plaintiffs who bring an infringement action based on questionable infringement claims (the subject of a pending Supreme Court cert petition).
- Reducing the ever-increasing costs of discovery in patent cases, and the differences in costs of litigation between district court and ITC patent litigation.
- Codifying a “customer stay provision” for use in patent cases, or even immunizing end users completely from liability for patent infringement.
- Potentially amending 19 U.S.C. § 1337 (the ITC’s unfair competition statute) to alter the ITC’s domestic industry requirement to only include “production-driven licensing” and exclude “revenue-driven licensing” — that is, only licensing that promotes the adoption of the patented technology would satisfy the domestic industry requirement. (This would likely limit many NPEs’ ability to bring infringement actions in the ITC.)
- Implementing measures to decide early in an investigation whether an ITC complainant satisfies the domestic industry requirement.
- Instituting hearings on public interest issues early in ITC investigations, to determine whether a complainant would even be able to prove entitlement to a remedy (i.e., an exclusion order) if it proves a violation of Section 337.
- Along the same lines encouraging courts and the ITC to decide other potentially dispositive issues early in patent cases.
- Applying the equitable principles of eBay v. MercExchange to the ITC’s decision to issue exclusion orders.
- Reducing incentives for duplicative ITC and district court litigation.
- Increasing transparency in the patent system, and well as in patent disputes and licensing (such as creating a “demand letter database”). This is something promoted by Prof. Chien — an interesting proposal to enlist the public’s help in resolving patent disputes, not unlike what is sometimes done in public calls for finding prior art to invalidate patents.
Although Congress certainly has a lot on its plate, judging by the types of questions posed to the witnesses, it wouldn’t be surprising to see additional pieces of patent-related legislation proposed over the next several months, addressing issues not covered by the reintroduced SHIELD Act. But whether this litigation addresses ITC-specific fixes, fee-shifting, or other issues, rest assured that the public debate about U.S. patent litigation will continue for the foreseeable future.